Epidemiological studies have suggested a negative correlation between alcohol intake and Alzheimer's disease. In vitro, ethanol negatively modulates NMDA receptor function. We hypothesized that chronic moderate alcohol intake leads to improved memory via adaptive responses in the expression of NMDA receptors and downstream signaling. We fed liquid diets containing no, moderate, or high amounts of ethanol to control and matched rats with hippocampal knock-down of the NR1 subunit. Rats with increased hippocampal NR1 expression were also generated to determine whether they had a phenotype similar to that of ethanol-fed animals. We found that moderate ethanol intake improved memory, increased NR1 expression, and changed some aspects of neurotrophin signaling. NR1 knock-down prevented ethanol's facilitatory effects, whereas hippocampal NR1 overexpression mimicked the effect of chronic low-dose ethanol intake on memory. In contrast, high-dose ethanol reduced neurogenesis, inhibited NR2B expression, and impaired visual memory. In conclusion, adaptive changes in hippocampal NMDA receptor expression may contribute to the positive effects of ethanol on cognition.